Minutes - Board - 2023-12-18COSTA MESA SANITARY DISTRICT
MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING
DECEMBER 18, 2023
Members present
Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer
Members absent
None
Staff present
Scott Carroll (General Manager), Noelani Middenway (District Clerk & Public
Information Officer), Gina Terraneo (Management Analyst II), Mark Esquer
(District Engineer), Alan Burns (District Counsel), Marc Davis (District Treasurer),
Kaitlin Tran (Finance Manager), Dyana Bojarski (Administrative Services
Manager)
Others present
Paul Kaymark, Nigro & Nigro PC
Jim Mosher, District resident
Meeting called to order at 4:30 P.M.
A. OPENING ITEMS
Procedural: 1. Call to Order - President Scheafer
President Scheafer called the meeting to order at 4:30 P.M.
Procedural: 2. Pledge of Allegiance - President Scheafer
President Scheafer led the Pledge of Allegiance.
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Procedural: 3. Invocation - Vice President Schafer
Vice President Schafer led the Invocation.
Procedural: 4. Roll Call - (If absences occur, consider whether to deem those
absences excused based on facts presented for the absence - such determination
shall be the permission required by law.)
District Clerk & Public Information Officer, Noelani Middenway, conducted
roll call and noted that President Scheafer, Vice President Schafer, Secretary
Perry, Vice Secretary Ooten, and Director Eckles were present.
Procedural: 5. Announcement of Late Communications - Unless directed otherwise
by the Board of Directors, all actions shall be based on/memorialized by the latest
document submitted as a late communication.
None.
Procedural: 6. Ceremonial Matters and Presentations.
None.
B. PUBLIC COMMENTS
Procedural: 1. Public Comments
President Scheafer opened public comments. Hearing none, he closed public
comments.
C. CONSENT CALENDAR
Action (Consent): 1. Approve Consent Calendar
Recommendation: That the Board of Directors approve the Consent Calendar as
presented.
Action (Consent), Minutes: 2. Approve the Board of Directors Study Session
Minutes of November 14, 2023
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Recommendation: That the Board of Directors approve the meeting minutes as
presented.
Action (Consent), Minutes: 3. Approve the Board of Directors Regular Meeting
Minutes of November 27, 2023
Recommendation: That the Board of Directors approve the meeting minutes as
presented.
Action (Consent): 4. Adopt Warrant Resolution No. CMSD 2024-06 Approving
District Warrant Registers
Recommendation: That the Board of Directors adopt Warrant Resolution No. CMSD
2024-06 approving District warrants for the month of November in the amount of
$310,607.98.
Action (Consent): S. Approve the Directors' Compensation and Reimbursement
of Expenses
Recommendation: That the Board of Directors approve the compensation and
reimbursement of expenses as presented.
Action (Consent): 6. Approve Payroll Transparency Disclosure for November
2023
Recommendation: That the Board of Directors approve and file the report.
Action (Consent): 7. Approve the Preparation of a Warrant to CR Transfer for
$212,177.44 in the December 2023 Warrant Register for November 2023
Recycling and Disposal Services
Recommendation: That the Board of Directors approve the preparation of a
warrant to CR Transfer in the amount of $212,177.44 in the December 2023 warrant
register for November 2023 recycling and disposal services.
Action (Consent): 8. Approve the Occupancy Count of 23,101 and Direct Staff to
Prepare a Warrant to CR&R Environmental Services for $258,405.84 for
November 2023 Solid Waste Collection Services
Recommendation: That the Board of Directors:
1. Approve the occupancy count of 23,101; and
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2. Direct staff to prepare a warrant to CR&R Environmental Services for
$258,405.84 for November 2023 solid waste collection services to be ratified
with the December 2023 warrant register.
Action (Consent): 9. Investment Report for the Month of November 2023
Recommendation: That the Board of Directors approve the Investment Report for
the month of November 2023.
Action (Consent): 10. Receive and File November 2023 Contracts Signed by the
General Manager
Recommendation: That the Board of Directors receive and file this report.
Motion: To approve the Consent Calendar as presented.
Motion by Art Perry, second by Brett Eckles.
Final Resolution: Motion Carries 5-0
Aye: Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer
No: None
There was no discussion.
D. PUBLIC HEARINGS
None at this time.
E. GENERAL MANAGER REPORTS
Action, Receive and File: 2. Receive and File the Annual Comprehensive
Financial Report (ACFR), and the Auditors' Required Communication for the
year ended June 30, 2023
Recommendation: That the Board of Directors receive and file:
1. The Annual Comprehensive Financial Report for Year Ended June 30, 2023,
2. The Auditors' Required Communication for the Year Ended June 30, 2023.
General Manager, Scott Carroll, requested to move item E2 ahead of item E1.
Finance Manager, Kaitlin Tran, provided an overview of the report. She
acknowledged District resident, Jim Mosher's, comments and noted that they
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will be reviewed. She introduced Paul Kaymark of Nigro & Nigro PC to
present report details.
Mr. Kaymark stated that the District had $13.9 million in total revenue and
$13 million in total expenses. He reviewed the financial details and
compared Fiscal Year 2022 to the prior fiscal year.
President Scheafer inquired about investment earnings from the California
Cooperative Liquid Assets Securities System (CLASS).
Mr. Kaymark stated that only 15% of the District's portfolio is invested in
CLASS.
Discussion followed regarding revenue from sewer connection fees and
large housing construction projects in Costa Mesa.
There was no further discussion, and the report was received.
Action, Receive and File: 1. Receive and File the Popular Annual Financial
Report (PAFR) for the Year Ended June 30, 2023
Recommendation: That the Board of Directors receive and file the Popular Annual
Financial Report (PAFR) for the Year Ended June 30, 2023.
Ms. Tran provided report details. She shared that the ACFR and PAFR will be
submitted to the Government Finance Officers Association (GFOA) for award
recognition.
Mr. Carroll stated that most local governments do not produce a PAFR. He
noted that the District's PAFR highlights its commitment to open government
and transparency.
District Counsel, Alan Burns, addressed comments submitted by Mr. Mosher.
Director Eckles asked if the District provides sewer services to John Wayne
Airport.
Mr. Carroll stated that the District does not service the entirety of John
Wayne Airport. He noted that they only service the traffic control side and
not the terminals.
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There was no further discussion, and the report was received.
Action: 3. Consider Approving the 2024 Meeting and Office Closure Calendar
Recommendation: That the Board of Directors approve the Costa Mesa Sanitary
District 2024 Meeting and Office Closure Calendar as presented.
Ms. Middenway presented the item. She noted the May and December Board
meeting dates and asked if the Board would like to alter those meeting dates
due to holiday observances.
Secretary Perry suggested moving the December Board meeting to
December 16, 2024 to accommodate holiday travel.
Director Eckles suggested combining the December Study Session and Board
meeting into one meeting.
President Scheafer suggested waiting until October or November 2024 to
decide on the December meetings.
The Board agreed to have the May Board meeting on the day after Memorial
Day, Tuesday, May 28.
Discussion followed regarding the locations for the Liaison Committee
meetings.
Motion: To approve the Costa Mesa Sanitary District 2024 Meeting and Office
Closure Calendar as presented.
Motion by Brett Eckles, second by Bob Ooten.
Final Resolution: Motion Carries 5-0
Aye: Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer
No: None
There was no further discussion.
F. ENGINEER'S REPORTS
None.
G. TREASURER'S REPORTS
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MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING
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Action: 1. Financing Options for Elden Forcemain Redundancy Project
Recommendation: That the Board of Directors provide direction on funding
options for the Elden Forcemain Redundancy Project.
District Treasurer, Marc Davis, provided report details. He stated that Project
341 is projected to cost $10.5 million. He discussed a lease purchase
arrangement as a potential funding option.
Discussion followed regarding the fees associated with a lease purchase
arrangement.
Mr. Davis discussed certificates of participation (COPS) and general
obligation (GO) bonds as potential funding options.
Discussion followed regarding the voter approval process for a GO bond.
Mr. Davis noted that an outside financial advisor would be required for a GO
bond.
President Scheafer stated that California Special Districts Association's
(CSDA) Finance Corporation is an advantage to special districts.
Director Eckles stated that if the District does not receive voter approval for
a GO bond, then they will have to consider the other funding options. He
inquired about interest rates.
Mr. Davis stated that the District will have the option to refund their COPs or
bonds if interest rates decrease.
Discussion followed regarding fees and project costs.
Mr. Burns noted that the District cannot spend public money on lobbying
activities that would influence an election.
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Mr. Davis described cash buy down options including funds available in the
Facilities Revolving Fund, the Fixed Asset Replacement Fund, and the Asset
Management Fund.
Vice Secretary Ooten stated that the current budget has almost $3.7 million
for forcemains. He asked if any of those funds are available for the Elden
Forcemain.
Mr. Davis stated that those funds are available for the Elden Forcemain. He
noted that the District can reprioritize their capital improvement projects to
determine other funding sources. He presented some potential
combinations of lease -purchase and cash buy down options to save money
over time. He discussed investment earnings and noted that there are
potential grant funding options that will require more research. He added
that grants will often include more auditing requirements.
Mr. Carroll stated that special districts are not eligible for federal grants. He
noted that they are typically available for city and county governments and
disadvantaged communities. He added that the District can potentially
receive grant funding from the State of California. He encouraged the Board
to work with the Costa Mesa City Council to receive infrastructure funding.
Director Eckles recommended discussing this item with the Liaison
Committee.
Mr. Davis continued his presentation and discussed debt service payments.
President Scheafer stated that the District may have to consider a
wastewater rate increase to fund the project.
Discussion followed regarding wastewater rate increases and decreases.
Mr. Davis stated that financing options will be determined after the project's
timeline is finalized.
Discussion followed regarding the project's estimate and the current multi-
year wastewater rate increase.
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Mr. Davis discussed GO bonds and the funding timeline as it relates to the
project's timeline.
President Scheafer stated that, based on the current information, he is not
interested in a GO bond for the project.
Secretary Perry and Director Eckles indicated agreement with President
Scheafer.
District Engineer, Mark Esquer, stated that he will inform the Board of any
changes to the project's estimate.
There was no further discussion.
H. ATTORNEY'S REPORTS
Action: 1. AB 1033 Accessory Dwelling Units: Local Ordinances: Separate Sale
or Conveyance
Recommendation: That the Board of Directors receive and file this report.
District Counsel, Alan Burns, provided a briefing on accessory dwelling units
(ADUs) and Assembly Bill (AB) 1033.
Discussion followed regarding the Cities of Costa Mesa and Newport Beach's
ADU ordinances.
There was no further discussion.
I. LOCAL MEETINGS: In accordance with AB 1234 (Gov. Code 53232.3), a report is
required to be given by a Director for any meeting for which expense
reimbursement of any kind is provided. Note: For meetings for which the per diem
compensation is sought, the Operations Code provides that such compensation is
authorized for each day's service rendered as a Director at the request of the Board
(not to exceed six days in one month), and certain meetings are specified as being
eligible as set forth in District Operations Code § 3.01.030. For meetings not so
listed, the Board must approve the service for it to be eligible for the per day
compensation.
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MINUTES OF THE BOARD OF DIRECTORS REGULAR MEETING
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1.Orange County Sanitation District (OCSD) - (President Ooten)
Vice Secretary Ooten reported on OCSD's Operations Committee and Board
meeting.
2. Santa Ana River Flood Protection Agency (SARFPA) - (Director Perry)
Secretary Perry stated that there was no SARFPA meeting this month.
3. Independent Special Districts of Orange County (ISDOC) - (Secretary Schafer)
Vice President Schafer had nothing to report for ISDOC.
4. California Special Districts Association (CSDA) - (Secretary Schafer)
Vice President Schafer shared CSDA's membership status and discussed
CSDA's Professional Development Committee.
S. Special District Risk Management Authority (SDRMA) - (Director Scheafer)
President Scheafer stated that there was no SDRMA meeting this month.
6.Other Meetings Qualifying for Reimbursement under CMSD Ordinance No. 55,
Operations Code Section 3.01.030
President Scheafer shared that he is ISDOC's alternate for the Orange County
and Operational Area Emergency Operations Center.
Vice Secretary Ooten shared that he attended a Water Advisory Committee
of Orange County (WACO) meeting, which discussed the history of the
Colorado River.
There was no further discussion.
1.OLD BUSINESS
None at this time.
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K. NEW BUSINESS
Action: 1. Adopt Resolution 2023-988 Requesting the Orange County Water
District (OCWD) Board of Directors Consider the Appointment of Robert "Bob"
Ooten to Fill the Vacancy in the Office of Director for Division 7
Recommendation: That the Board of Directors adopt Resolution 2023-988
requesting the Orange County Water District (OCWD) Board of Directors consider
the appointment of Robert "Bob" Ooten to fill the vacancy in the office of Director
for Division 7.
Vice Secretary Ooten shared that OCWD's Division 7 representative, Kelly
Rowe, passed away recently. He announced that he is running to fill his
vacancy and discussed his relative experience.
Motion: To adopt Resolution 2023-988 requesting the Orange County Water
District (OCWD) Board of Directors consider the appointment of Robert
"Bob" Ooten to sill the vacancy in the office of Director for Division 7.
Motion by Art Perry, second by Mike Scheafer.
Director Eckles inquired about the position and appointment process.
Vice Secretary Ooten confirmed that there is no conflict of interest between
serving on the District's Board and OCWD's Board.
Final Resolution: Motion Carries 5-0
Aye: Arlene Schafer, Art Perry, Bob Ooten, Brett Eckles, Mike Scheafer
No: None
There was no further discussion.
L. ORAL COMMUNICATIONS AND DIRECTOR COMMENTS
Discussion: 1.Oral Communications and Director Comments
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Director Eckles thanked District staff and Board members their work and
Mr. Mosher for his attendance. He wished everyone a happy new year and
merry Christmas.
Vice Secretary Ooten stated that OCSD committees will not be meeting in
January and expressed support for combining Board meetings for efficiency.
President Scheafer thanked District staff for their support and hard work
and wished everyone happy holidays.
There were no additional comments.
M. ADJOURN TO CLOSED SESSION
None at this time.
N. RECONVENE TO OPEN SESSION
None at this time.
O. CLOSING ITEMS
Procedural: 1. Adjourn — The next meeting of the Costa Mesa Sanitary District
Board of Directors will be held on Monday, January 22, 2024.
President Scheafer adjourned the meeting at 6:12 p.m.
Art Perry Mike Scheafer
Secretary President